Question: ONLY NEED HELP WITH QUESTION 2. DO NOT ANSWER QUESTION 1 PLEASE! 1. The Metropolitan Bus Company (MBC) purchases diesel fuel from American Petroleum Supply.

ONLY NEED HELP WITH QUESTION 2. DO NOT ANSWER QUESTION 1 PLEASE!

ONLY NEED HELP WITH QUESTION 2. DO NOT ANSWER

1. The Metropolitan Bus Company (MBC) purchases diesel fuel from American Petroleum Supply. In addition to the fuel cost, American Petroleum Supply charges MBC $250 per order to cover the expenses of delivering and transferring the fuel to MBC's storage tanks. The lead time for a new shipment from American Petroleum is 10 days, the cost of holding a gallon of fuel in the storage tanks is $0.04 per month, or $0.48 per year; and annual fuel usage is 150,000 gallons. MBC buses operate 300 days a year. C$ a. What is the optimal order quantity for MBC? b. How many orders will be placed in a year? c. What is the time between orders? d. What is the reorder point? e. What is the total inventory cost? 2. Consider Problem 1 again. Suppose fuel usage during lead time follows a normal distribution with mean 12,200 gallons and standard deviation 90 gallons. Also, the company can tolerate a probability of stockout of 3%. a. What is the new reorder point? b. Calculate the additional cost due to safety stock

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